Solved: What is the expected rate of return on investment, Finance Basics

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What is the expected rate of return on investment

Problem:

An investment is expected to pay the following annual cash flows:

0
1: $600
2: $600
3: $800
4: $1200
5: $1500

If the investor thinks the apppropriate interest rate of this investment is 9.3%, what is the net present value of the above cash flow stream?

Suppose your are informed that the price of this investment is actually worth $3,000, what is the expected rate of return on this investment:

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